Calls to Government to reduce VAT for hospitality sector still subject to Government Resistance

Deckchairs and donkeys, hiking and heritage, feasts and festivals, rollercoasters and rock music – whatever your idea of a holiday in the UK, it ought to be available at a fair price. This is why the campaign cut VAT on tourism to 5% so British hotels and attractions aren't priced out of the market by their European competitors.

Despite contributing £115bn to the UK economy each year and employing 10% of the national workforce, and consistent calls on the Government to reduce VAT, it still stands at 20% compared to 10% in Italy, 9% in Ireland and 7% in France for visitor accommodation. We are falling behind our European counterparts and it’s holding back the UK economy.

Cutting tourism VAT from the current 20% to 5% would help hard-working British families afford the great range of domestic breaks and holidays available across the country.

Cutting Tourism VAT would also have three massive benefits: it would drive £4billion of new revenue, create 80, 000 jobs and would not cost the Government anything but would stimulate the hospitality and tourism sector. 153,000 new jobs were created in the hospitality sector between 2010-2012, representing 27.7% of all total jobs growth hospitality and tourism is represented in 96% of government constituencies, more than any other single industry in the UK.

We at the BHA, along with nearly 500 groups, associations, individual hotels, tourist attractions and restaurants across the UK have been coordinating an industry wide appeal to with our CutTourismVAT campaign.

Backed by Merlin Entertainment, Bourne Leisure and BALPPA (British Association of Leisure Parks, Piers and Attractions) the CutTourismVAT campaign has been designed to promote British hospitality and tourism as a vibrant industry to work in, power the industry’s potential to drive economic vitality and jobs, and celebrate the 2.7 million Hospitality workers in Britain.

A great example of those supporting the CutTourismVAT campaign is the 4* hotel, The Cavendish London. Getting behind the campaign, it will be the first hotel in the UK to simulate the proposed lower rate of VAT on its room rates during the summer months. By offering a reduced room rate, it is providing it’s guests with a more affordable stay, and in turn, promoting the impact an increase in business and leisure stays will have on the economy. Customers will be encouraged to quote “5% VAT” to redeem the reduced room rate when they book. We are delighted that The Cavendish London is taking strong action to promote the campaign.

We know we have a solid rationale. One economic advisor to the Treasury told the campaign that a cut in tourism VAT would be one of the most efficient means of generating growth at low cost to the Exchequer, although the Government is yet to be persuaded.

The 2012 Olympics provided a massive boost, but Britain will have to move a lot faste to keep up with other runners in the race.

Let’s work together to bring pressure to bear and convince Government that cutting VAT is the ‘big change’ required to significantly grow the hospitality and tourism economy and employment in the sector.

Ufi Ibrahim
Chief Executive

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2 Responses to “Calls to Government to reduce VAT for hospitality sector still subject to Government Resistance”

  1. Serge Shishkin

    Good time of the day Vish,

    Thank you for your interest and for reading Ufi’s blog – I’ll make sure to pass your regards to her.
    Would you be able to contact our offices directly – 0207 404 7744 to discuss it further?

    Many thanks,
    Communications Assistant

  2. Vish Rao

    Hi Ufi,

    I live in the UK but am currently in India. Our company offers expert led tours for small groups of upto 15 to covering wildlife, nature and culture.

    I wanted your advice on whom i could contact to promote this.

    It will suit discerning travellers maybe in the 35 to 60 age group.

    I read your column and would like to connect with you when I’m back in London

    best Regards